Unmet needs or unmet wants? Sleeping sickness vs. facial hair

On whether maximising monetary value is always a desirable end for society, it’s worth quoting at length from Farley (2008):

Aventis developed a compound, eflornithine, with promising pharmaceutical characteristics. Scientists discovered in 1979 that  flornithine killed trypanosomes, the parasite responsible for African sleeping sickness, a debilitating disease transmitted by the tsetse fly that threatens 70 million Africans. Although the only other treatment for second-stage sleeping sickness is extremely painful to administer, often ineffective, and often lethal,Aventis could not profit from selling the drug to poor Africans and discontinued production for that purpose.

At the same time, however, Bristol Myers Squibb and Gillettewere profitably producing eflornithine to remove unwanted facial hair in women. Aventis and Bristol Myers Squibb agreed to again produce eflornithine for the treatment of African sleeping sickness only after the NGO Médecins Sans Frontières threatened to publicize the issue (Gombe 2003; WHO 2006).

Had the market been left to its own devices, the rationing function of price would have continued apportioning eflornithine to rich, hirsute women rather than destitute, diseased Africans. The allocative function of price still apportions few resources toward cures for lethal diseases that afflict the poor (Trouiller et al. 2002). Although most people would presumably think saving lives is a more valuable use of resources than developing cosmetics, market demand is a function of preferences weighted by wealth and income. Markets allocate resources toward those who have money and unmet wants, not toward those who have unmet needs.

Farley, J. 2008. The Role of Prices in Conserving Critical Natural Capital. Conservation Biology 22:1399-1408. doi: 10.1111/j.1523-1739.2008.01090.x

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